The Securities and Exchange Board of India (SEBI) has announced a significant update to its insider trading regulations, granting greater flexibility for market participants. Under the latest circular, SEBI has allowed subscriptions to non-convertible securities during trading window closure periods. This move aligns with the regulator’s broader efforts to facilitate market operations while upholding investor protections.
Key Highlights:
- Expanded Exemptions:
- The new circular builds upon the SEBI (Prohibition of Insider Trading) Regulations, 2015.
- Transactions like rights issues, conversions of warrants or debentures, and share tendering in buy-backs were already exempt from trading window restrictions.
- The latest update extends these exemptions to include subscriptions to non-convertible securities.
- Evolution of Exemptions:
- In its circular dated July 23, 2020, SEBI had already included Offer for Sale (OFS) and Rights Entitlement transactions within the scope of exemptions.
- The new update further broadens the exemptions, enhancing ease of participation in the market.
- Recent Insider Trading Reforms:
- SEBI has made strides in refining its insider trading regulations over the past year:
- September 2024: Expanded the definition of ‘connected person’ to include household partners and revised ‘immediate relative’ to ‘relative’ for a broader scope.
- November 1, 2024: Enforced stricter insider trading rules for asset management companies. These rules mandate maintaining detailed records of individuals with access to unpublished price-sensitive information (UPSI) and signing confidentiality agreements.
- SEBI has made strides in refining its insider trading regulations over the past year:
By including non-convertible securities under trading window exemptions, SEBI aims to enhance market efficiency and reduce operational constraints for issuers and investors, fostering a more robust and transparent securities market.
TOPICS:
SEBI